London market manages to stage recovery

The FTSE 100 managed to recover most of the value lost in the first half of the week due to the drone attack on two oil facilities in Saudi Arabia.

Closing up 42.37 points – a rise of 0.58% – to 7,356.42, traders appeared to broadly accept the Saudis’ claims that the Aramco sites will be back to full capacity by November, while welcoming the dovish sounds coming from the Bank of England.

The London blue chip index followed its French and German counterparts in rising, with the Paris Cac up 0.68% and the Frankfurt Dax up 0.55%.

And with investors hopeful that the Bank of England could cut rates if a no-deal Brexit damages the economy, the pound also rose slightly against the dollar, with a pound worth 1.2474. Against the euro it fell 0.0010 to 1.1295.

Fiona Cincotta, senior market analyst at City Index, said: “As expected the Bank of England kept rates on hold in a unanimous vote.

“However, the central bank struck a more dovish tone, indicating that its next move could be a rate cut rather than a hike.

“Up until now the BoE had retained a hawkish bias; today that was replaced with a slightly more dovish stance as the UK central bank joins the other central banks around the globe with a more cautious outlook.”

The bank did say a rate hike may be needed if a smooth Brexit takes place, but, most analysts believed the most probable outcome is a continued Brexit and political uncertainty – which may require a rates cut.